Case Laws

Lecture 7
Teaching Seminar | Corporate Law
 Sanjiv Kothari v Vasant Kumar Chordia
(2005) 66 CLA 45 (CLB)
• Appointment of Directors (Section 152 of Companies Act, 2013)
• The case surrounded the issue of irregular allotment of shares, appointment of directors and
failure to meet with the statutory compliance for conducting board meetings.
• Facts: A Board meeting was convened by one of the directors, Mr. R.K. Newatia, in Kolkata on
August 31, 2002, upon his request. However, at the same time, the Managing Director of the
Company called for a meeting at the registered office in Bhubaneswar because there were some
urgent issues to be discussed. Despite this the director proceeded to convene the meeting in
Kolkata. In the meeting at Kolkata, an alternate director and additional director were appointed
and due filings were done with the ROC. The Managing Director subsequently held a meeting
with the same agenda of appointment and issued due notice, however the petitioner-director
rejected this notice and did not attend the meeting.
 Sanjiv Kothari v Vasant Kumar Chordia
(2005) 66 CLA 45 (CLB)
• Judgment: The court found that the petitioners committed fraud by illegally
convening a parallel Board meeting in Kolkata on August 31, 2002.
• The attempt to induct petitioner No. 2 and another person as directors in the Board of
the respondent-company was deemed unauthorized and illegal.
• The Court upheld the legitimacy of the meeting convened with same agenda by the
Managing Director in Bhubaneswar.
• The proposals from the unauthorized Kolkata meeting were rejected in a duly
convened Board meeting. The meeting in Kolkata was held to be an attempt to
illegally take over the company.
 Achintya Kumar Barua Vs Ranjit Barthkur Company
Appeal
(AT) No. 17 of 2018
• Meetings of Board (Section 173 of Companies Act, 2013 and Rule 3 and 4 of Companies
(Meetings of Board and its Powers) Rules, 2014
• The case before the NCLAT was in appeal of the NCLT judgment regarding permissibility of
attending meetings via videoconferencing.
• Facts: The respondent-Director in the appeal was attending meetings of the Board via
videoconferencing and the appellants were apprehensive that it wouldn’t be possible to ensure
that no one else was present with the respondent-Director during the videoconferencing.
• Section 173(2) of the Act permits directors to attend meetings via videoconferencing. Further
Rule 4 of the 2014 rules lists down certain matters which cannot be deliberated upon using
videoconferencing.
 Achintya Kumar Barua alias Manju Baruah Vs Ranjit
Barthkur Company Appeal
(AT) No. 17 of 2018
• Judgment: The appellants were not successful in their appeal. The
National Company Law Appellate Tribunal (NCLAT) upheld the National
Company Law Tribunal's (NCLT) decision, allowing directors to
participate in Board meetings via videoconferencing. The NCLAT
emphasized the importance of adhering to the provisions for
videoconferencing, considering them progressive and in the public
interest. The appellants' concerns were dismissed, and there was no order
as to costs.
 Belfin Spa & Ors. (Appellants) v.
Cima Shyam Springs Private Limited & Ors. (Respondents)

• Removal and Reappointment of Directors (Section 169 of Companies Act, 2013)

• The case deals with the legality of director removal and reinstatement, which had
significant implications for the control and management of the company.
• Facts: The NCLT had held the removal of two directors to be done wrongfully
without compliance of section 169 of the Companies Act, 2013. This is because the
provision of giving due notice to the directors had not been followed. The NCLT had
ordered reinstatement of their directorship as continuous directorship, i.e., since the
removal was wrongful it would not be taken into account.
Belfin Spa (A Company incorporated Under the laws of Italy) &
Ors. (Appellants) v.
Cima Shyam Springs Private Limited & Ors. (Respondents)
• Judgment: The tribunal had restored the directorship of Appellants 2 and
3, treating them as having been continuously in their positions since the
disputed removal. The decision of the NCLT was upheld by the NCLAT.
• The reinstatement of the directors was crucial for Belfin Spa, as it affected
the company’s governance and decision-making process.
• The case underscores the necessity for companies to adhere to legal
procedures and regulations when making significant changes to their
board.